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Fogo de Chão same-store sales dip in 2Q

Fogo de Chão Inc.’s same-store sales in the second quarter ended July 3 slipped 1.6 percent, led by a 4 percent decline among its restaurants in Brazil, the company said Tuesday.

The Dallas-based churrascaria chain, which went public in June 2015, reported net income was up 144.5 percent in the quarter, to $6.1 million, or 21 cents a share, from $2.5 million, or 10 cents a share, in the same period a year ago. Revenue rose 2 percent in the quarter, to $69.6 million from $68.1 million in the prior-year period.

Company-owned systemwide same-store sales declined 1.6 percent on a constant currency basis, with a 1.1 percent sales decline at U.S. restaurants and a 4 percent decline at Brazil units. “The recession in Brazil continues to impact guests,” the company said in a statement.

As of July 3, Fogo de Chão had 31 locations in the United States, 10 units in Brazil and one joint-venture restaurant in Mexico City. It has since opened another domestic location, in King of Prussia, Pa.

“We continue to drive positive traffic in the U.S. this quarter, up 0.6 percent, and our traffic outpaced our peers by 310 and 150 basis points as reported on the Knapp Track High End Steakhouses and Blackbox Upscale/Fine-Dining group indexes,” said Larry Johnson, Fogo de Chão CEO, in a statement.

“In today’s softening sales environment,” Johnson added, “guests are placing greater emphasis on value, customization, variety and speed of service, and we believe that our strategies are designed to deliver on these needs.”

The company said U.S. restaurant revenue increased 5.8 percent, to $59.3 million, in the second quarter, up from $56.1 million in the second quarter 2015 primarily because of new restaurant locations opened in the past 12 months.

Fogo de Chão on Tuesday also lowered its guidance on revenue and same-store sales for the year.

It said same-store sales would be in the range of down 1.5 percent to down 2.5 percent, lowered from earlier guidance of flat to up 1 percent. The company estimated revenue for the year would $281 million to $285 million, down from earlier forecasts of previously $290 million to $294 million.

Update: Aug. 10, 2016 This story has been updated to reflect the addition of one new U.S. restaurant.